Area Realtors won't miss 2008, look ahead to an improved 2009

James Wedgeworth cites an old country music song in describing the area's 2008 real estate business: "Thank God and Greyhound you're gone."

"That sums up 2008," said Wedgeworth, a Realtor with Charter I. "I'm glad it's over."

The tune's message is appropriate considering sales in the southeastern corner of the state slipped for the third straight year after a peak in 2005, according to the South Carolina Association of Realtors.

Wedgeworth and colleagues said the Hilton Head Island-area market got progressively slower amid a recession fueled by a meltdown of the nation's financial system, a nerve-wracking presidential election and a continuing crisis of consumer confidence.

Through November, the state association reported sales of 1,803 residential homes in the Hilton Head area, defined as Beaufort, Jasper, Allendale, Barnwell, Colleton, Hampton, Orangeburg and Bamburg counties.

That puts 2008 on pace for fewer than half of 2005's total sales of 4,189.

Average sales prices have followed a similar trend. They have declined each year from a five-year high of $365,000 in 2005.

Through November of 2008, the average sales price has fallen to $325,000.

Tom Jackson, president of the Hilton Head Area Association of Realtors, wonders if the boom will ever repeat itself.

"It may not be like 2005 ever again," Jackson said.

The prolonged slump has taken a toll on the number of Realtors as well.

Andy Twisdale, also a Realtor with Charter I, estimates 350 to 400 people have left the local real estate business.

Because real estate plays such a key role in the area's economy, the slowdown has affected other sectors of the local economy.

Unlike the "real world," Wedgeworth said, "in Hilton Head, everything's tied to real estate."

Although area Realtors hope for gradual improvement this year, they said progress may be slow.

Twisdale suspects there's a glut of inventory that could take about two years to sell on Hilton Head -- perhaps three in the Bluffton area.

Realtors who've stayed in the business see potential, however, because asking prices have fallen just as the government has dropped interest rates. That combination could open the relatively expensive market here to more would-be buyers.

For example, 74 houses in Hilton Head Plantation are now for sale for less than $500,000, Twisdale said.

In the summer of 2005, only 12 were available at that price.

Houses priced at that level are drawing multiple offers.

"There are buyers just waiting for a deal," Twisdale said. "The smart buyers are realizing that the prices today are the best they've been" in 10 to 15 years.

And prices aren't likely to creep up again, Twisdale said, until there is closer to six months of inventory on the market.

To reach that level, Realtors know they must adjust to the new dynamic.

Where the industry's old maxim was "location, location, location," it's now "price, price, condition," Twisdale said.

Where eager buyers were once willing to cinch deals relatively quickly, they must now be convinced of the value of any home they're considering.

In other words, motivated sellers must set asking prices smartly and do all they can to differentiate their property from dozens of comparable ones.

That can mean investing in landscaping, appliances and remodeling -- and sometimes paying professionals to "stage" a house so it will be at its most attractive.

If real estate professionals make those extra efforts, the area should see a few months of stable sales, Twisdale predicted. Then, the natural allure of life on or near Hilton Head should make this one of the first communities in the nation to emerge from the recession, just as it is usually one of the last to enter a downturn, he said.

Despite the current state of the market, Wedgeworth pointed to the sunny weather, miles of beaches, more than 30 golf courses and more than 200 tennis courts that Hilton Head offers.

"Those haven't changed," Wedgeworth said. "What's changed is the national economy."